Microsoft Shrugs Off iPad Pro Threat

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The launch of a smaller iPad Pro is the latest sign Apple is trying to woo the enterprise market. Now the company is specifically targeting Windows users with its updated device, as indicated by keynotes given during a March 21 event that also brought the launch of the iPhone SE and iOS 9.3.

Phil Schiller, senior vice president of worldwide marketing at Apple, listed a couple of purposes for shrinking the enterprise tablet into a more compact 9.7-inch model:

"Why make a second iPad Pro that's smaller? Well, there are two really great reasons," he explained. "It's a large enough display to get all your work done, but small and light enough to carry with you everywhere you go."

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The updated iPad Pro, which weighs less than one pound, has also been outfitted with a few new features including a brighter and less reflective screen than the iPad 2. It also includes a TrueTone display, which uses sensors to detect the color temperature of ambient light and adjusts its screen to match the coloring.

Schiller reported the 9.7-inch model has been Apple's most popular iPad, and that the company has sold 200 million units of this tablet to date. While the popularity of the smaller iPad may have contributed to Apple's decision to shrink its iPad Pro, that choice may also have occurred because the 12.9-inch iPad Pro was perceived as too bulky for truly mobile use.

He then brought the focus to its competition with Microsoft.

"There's a second group of people we'd love to reach with this new iPad Pro," he said. "Windows users!" He noted the majority of people purchasing the iPad Pro were previously using a Windows PC or desktop.

More than 600 million PCs currently in use are over five-years-old, he continued, noting how people using older machines "would really, really benefit" from using an iPad Pro.

"Windows PCs were originally conceived of before there was an Internet, before there was social media, before there were app stores," said Schiller, painting the collection as outdated compared with the new iPad.

To listen to Schiller, it would seem many Windows users will find a PC replacement in the smaller iPad Pro. But is that the case? Will Apple really sway members of the enterprise market who have been using Windows PCs for years? In most cases, not likely.

Industry analysts don't seem to think the iPad Pro poses a legitimate threat to Microsoft's hardware and software offerings, especially within the enterprise market.

"Some Windows users may go for an iPad Pro," said Frank Gillett, vice president and principal analyst at Forrester. "But many will stick with the inexpensive laptops they're used to, unless a specific need or situation causes them to rethink their purchase plans."

Gillett's statement aligns with a notable trend in iPad sales. Apple's tablet continues to sell, but has exhibited consistent decline over the past several quarters.

The slowdown could be attributed to a lack of innovation. In the past several releases of the iPad, there have been few noteworthy changes that would motivate current iPad owners to replace their devices or inspire non-owners to purchase one. Unless a specific need arises, as Gillett describes, there is little reason to upgrade.

"The iPad Pro competes with Microsoft only in a specific subset of cases," said J.P. Gownder, Forrester VP and principal analyst serving Infrastructure and Operations.

For most professionals, the iPad Pro will be a secondary device for on-the-go email and light productivity. It may be a primary tool for employees at organizations that have heavily invested in iOS. GE, for example, has moved several business apps to the platform.

"Microsoft's Surface, Surface Pro and Surface Book, plus similar Windows machines from Dell and other OEMs are strong now, competitively priced and, most importantly, can both run business applications and easily be managed as PCs," said Gownder. "So we don't see a huge impact, particularly at the price points Apple has for iPad Pro."

Despite Apple's efforts to make iOS more business-friendly, he continued, another obstacle impeding its enterprise growth is the hassle of transferring every business application over to a new system. Further, the lack of a mouse would hinder the use of business tools like spreadsheets.

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Microsoft doesn't seem too shaken by potential competition from the iPad Pro. When asked about Schiller's comments, the company acknowledged the progress of Windows 10.

"We're thrilled with the successful launch of Windows 10 and we continue to see huge opportunity in the consumer and enterprise PC markets," wrote a Microsoft spokesperson in an email, noting that the OS is currently running on 200 million devices.

The company also pointed to the Surface, the hybrid that launched Microsoft into the 2-in-1 device category. According to an IDC report that Microsoft quoted, this market will increase 73% year-over-year by the end of 2016, and reach 63.8 million shipments by 2020.

There's no question Microsoft has an edge in the enterprise space, especially with its Office suite. It seems Apple has also recognized this, since the company is selling Office 365 as an accessory for the iPad.

(Image: Apple)

Customers are given the option to subscribe at checkout, when they can choose to add Office 365 Personal, Office 365 Home, or Office 365 University to their new tablet.

However, customers who order the new iPad Pro won't have to add anything to access Office 365. Microsoft adds Office apps at no charge on devices with displays measuring 10.1 inches or less -- a detail noticeably absent from Schiller's keynote.

Regardless, Apple's decision to bundle Office with iPad is interesting, especially given Schiller's comments about Windows PCs during the debut of the latest iPad Pro. The company may believe Windows PCs are outdated, but Apple is acknowledging that people will want Office to get things done.

"The iPad Pro competes with Microsoft only in a specific subset of cases," said J.P. Gownder, Forrester VP and principal analyst serving Infrastructure and Operations.

For most professionals, the iPad Pro will be a secondary device for on-the-go email and light productivity. It may be a primary tool for employees at organizations that have heavily invested in iOS. GE, for example, has moved several business apps to the platform.

"Microsoft's Surface, Surface Pro and Surface Book, plus similar Windows machines from Dell and other OEMs are strong now, competitively priced and, most importantly, can both run business applications and easily be managed as PCs," said Gownder. "So we don't see a huge impact, particularly at the price points Apple has for iPad Pro."

Despite Apple's efforts to make iOS more business-friendly, he continued, another obstacle impeding its enterprise growth is the hassle of transferring every business application over to a new system. Further, the lack of a mouse would hinder the use of business tools like spreadsheets.

Would you switch from a Windows PC to an iPad Pro? Why or why not? What did you think of Schiller's comments?

[Editor's note: This article was updated to include J.P. Gownder's comments.]